Mitchells & Butlers has been stood-up by Punch Taverns over an offer of marriage that Punch today admitted had been far too generous.

The chill winds blowing through the pubs sector, meanwhile, has seen Enterprise Inns, another of the country's major landlords, postpone a £750 million refinancing and launch a rant at the Chancellor's "ill-conceived" rise in alcohol duty.

Before a put-up or shut-up deadline today, Punch Taverns, headed by former City banker Giles Thorley, said it had withdrawn its merger offer to M&B lodged two months ago.

It consisted of a 50-50 merger plus £175 million to M&B shareholders.

Since then both companies' share prices have sunk, with M&B's shares plummeting faster.

In a statement today, Punch said that, after preliminary negotiations and due diligence, it had concluded "that the terms proposed to M&B are no longer in the best interests of Punch shareholders and therefore Punch is withdrawing its offer".

Since that 4 February offer, Punch's shares have dived 22%. But M&B's had fallen by nearly 30% at last night's close, valuing M&B's equity lower than Punch's market capitalisation of £1.38 billion. M&B shares fell a further 4% on today's news, off 13¾p to 315¾p.

Several private-equity firms have looked at M&B, which has been hit by a botched property refinancing.

But sources indicate the way has now been cleared for a joint offer from CVC - best known for owning Formula 1 and the AA and Saga group - and Blackstone, the US group whose UK interests include the Café Rouge group and CenterParcs.

Meanwhile, Enterprise Inns today said it is abandoning a £750 million refinancing due to "the current volatile and uncertain conditions in the debt markets." The news came as the firm announced trading had not worsened in recent weeks despite the ongoing effects of the smoking ban, shrinking disposal incomes and soaring food, fuel and utility bills.

Chief executive Ted Tuppen said: "The Government's punitive and illconceived increases in duty on alcohol will impact all responsible pub-goers and do nothing to address the problems of anti-social behaviour and binge-drinking."